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9 months ago

Pls help in accounting

Business

1 answer:

solmaris [256]9 months ago

4 0

Based on the given transactions in July, the journal entry to record the payment of rent on July 31st is:

Date Account Title Debit Credit

July 31st Rent expense $3,000

Prepaid Expenses - Rent expense $3,000

<h3>How to write the journal entry for prepaid expenses?</h3>

Accounting uses the accrual basis which means that expenses are only recognized when they have been incurred and not when they are paid for. If you paid $40,000 for rent and yet your monthly rent is $5,000, only the $5,000 will be recognized as rental expense. The rest of the money is treated as a prepaid expense.

When another month elapses, then the other amount of rent can be recognized as is the case here. The month ended on July 31st and there was a need to record rental expense and so it was recorded at the rent expense of $3,000.

The journal entry would therefore show Rent Expense account is debited and the Prepaid Expenses account is credited to show it is reducing.

Full question is:

Record the journal entry to represent the payment of rent.

Find out more on prepaid expenses at brainly.com/question/27961230

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Answer:

Explanation:

Given that :

Jacob Corcoran bought 10,000 shares of Grebe Corporation stock two years ago for $24,000.

Last year, Jacob received a nontaxable stock dividend of 2,000 shares in Grebe Corporation, and

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The gain on the sale of the 2,000 shares is calculated by the difference from the sales price and the shares sold.

I.e $24000 - $18000 = $6000

The tax rate on the $2000 = Purchase price of the shares/ (Original shares bought + new shares)

The tax rate on the 2000 shares = $24000/($10000+$2000)

The tax rate on the 2000 shares= $24000/$12000

The tax rate on the 2000 shares= $2 / shares

The Gain in the share = selling price - tax basis in the 2,000 new shares

The Gain in the share = $18000 - $4000

The Gain in the share = $14000

∴

This is the long capital gain i.e $14000

The memo in summary goes thus:

The amount of $24000 is being paid by you for 10000 shares of stock in Grebe Corporation in which a stock dividend of 2000 was received. However, the share is sold for $18000, the tax basis is deduced by dividing $24000 purchasing price by $12000(original price + new shares price) which resulted into a $2/ shares. The $14,000 gain on the sale is a long-term capital gain. The gain on the sale is long term because the original Grebe stock has been held for more than one year.

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Answer:

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= Retained earnings balance- dividend paid to prferred stock holders.

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= $500,000 - Dividend in arrears

= $500,000- $120,000

= $380,000

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Common Stock equity + Balance of retained earnings

= $700,000 + $380,000

= $1,080,000

The book value per share = $1,080,000/ outstanding shares

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Part 2: To compute the book value of the common stock at December 31, 2020 Preference stock has liquidating value of $106 per share

Stockholder's equity:

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Preferred stock liquidating premium = (106-100) x 5000

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Retained earnings: To calculate retained earnings we need to deduct dividends in arrears to prefered stock holders and then ascribe the remaining value to retained earnings.

Dividend in Arrears= 3 years @ 8% interest per year

= 500,000 x 0.08 x 3= $120,000

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= Retained earnings balance- net losses from previous years - dividend paid to prferred stock holders - liquadating premium to preferred stock

=$800,000 (net income for 2020)- $40,000 (net loss for 2019) - $260,000 (net loss for 2018)

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